Designated Zone businesses are considered to be established ‘onshore’ in the UAE for VAT purposes. This means that they have the same obligations as non-Designated Zone businesses and have to register, report and account for VAT under the normal rules. They can join a tax group (VAT group) provided they meet the required conditions. The VAT Guide for designated zones cover the below points. Which Free Zones should be considered as Designated Zones? Free Zone = Designated Zone, only if
- Designated Zone is an area specified by a Cabinet Decision as being a “Designated Zone”
- Certain tests of fencing, security controls, and custom controls are in place.
- The Authority expects that a written statement from the recipient that the goods will not be consumed, should be sufficient to treat such transaction as “Outside the Scope” of VAT.
- Where goods are moved between Desig ated Zones, the FTA may require the owner of the goods to provide a financial guarantee for the payment of VAT, which that person may become liable for should the conditions for movement of the goods not be met.
Tag: Designated zones, Guide, Uae, Vat